This application proposes research on the human ability to localize sound, with special attention given to the effects of rooms. Localization of steady-state noise sources in the azimuthal plane is studied experimentally in a reverberant environment (LRE Project). The experimental data are compared with models of the human binaural system, based upon acoustical measurements with an artificial head and upon psychophysical studies of cross-correlation detection in noise. Reverberant environments are known to constitute a particular difficulty for hearing impaired individuals. Coupled to this study is a test of localization decision theory models (LDT), focusing on the unique circumstances that arise in source localization experiments. Three other projects study localization thought to be mediated by spectral cues. Frequency direction bands are associated with particular directions in space, particularly in the median sagittal plane (MSP), by normal listeners. Project MSP-DB tests the hypothesis that information across direction bands is summable. Project MSP-HI tests hearing-impaired individuals, who have extreme difficulty localizing broadband sources in the MSP to discover whether they have direction bands. If they do, attempts will be made to prefilter signals to restore NISP localization. Project MSP-PE is an in-depth probe of the recent discovery that there is a precedence effect in the MSP that parallels the precedence effect obtained in other planes where binaural differences occur. Project PE-One explores what appears to be a logical consequence of the MSP precedence effect, namely that there should be a localization precedence effect with a single ear. Experiments of graded difficulty are here linked with theory derived from other spectral precedence effect studies. The EXT project proposes a new technique for synthesizing auditory images that are externalized and compactly localized using headphones. The technique is compared with standard head-related transfer function techniques, and four specific applications are suggested if the technique is successful.